ZoomInfo Class Action Lawsuit: What Investors Should Be Aware Of

9/8/2024

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stock chart of tall buildings used in ZoomInfo class action lawsuit

Give ZoomInfo stock loss lawyer Timothy L. Miles a call about the ZoomInfo class action lawsuit

The ZoomInfo class action lawsuit has caused a stir in the investment community, drawing attention to allegations of securities fraud against the company. If you are an investor who purchased ZoomInfo Technologies Inc. securities during the specified class period, you may have rights to seek compensation for potential losses. This legal action underscores the importance of staying informed about the companies in which you invest and understanding your rights as a shareholder.

You will find this article provides a comprehensive overview of the ZoomInfo lawsuit, breaking down the key allegations and explaining the lead plaintiff process. We'll explore the specific claims made against ZoomInfo, the timeline of events, and what it means for affected investors. Additionally, you will learn about the steps you can take to protect your interests and potentially recover losses if you believe you've been impacted by the alleged misconduct. Understanding these aspects is crucial to making informed decisions about your involvement in this legal action.

Overview of the ZoomInfo Class Action Lawsuit

The ZoomInfo class action lawsuit has caused a stir in the investment community, drawing attention to allegations of securities fraud against the company. This legal action, filed by several law firms seeks to represent purchasers of ZoomInfo Technologies, Inc. (NASDAQ: ZI) Class A common stock during a specified period.

Key Allegations

The lawsuit alleges that ZoomInfo and certain top executive officers violated the Securities Exchange Act of 1934. The primary accusations against the company include:

Temporarily inflated financial and operational results due to the COVID-19 pandemic's effects, which artificially increased demand for ZoomInfo's digital contact information database.
Failure to disclose that significant portions of ZoomInfo's existing customer base were attempting to reduce their use of the company's product or abandon it entirely.
Use of manipulative and coercive auto-renew policies, including threats of litigation, to force customers into extending their contracts against their will.
Damage to customer relationships, client franchise, and competitive advantages due to these coercive retention tactics, creating a hidden demand cliff for future contract renewals.
Material overstatement of ZoomInfo's reported revenues, operating income, and customer and retention metrics as a result of these practices.

Class Period

The class action lawsuit covers a specific timeframe known as the "Class Period." For the ZoomInfo lawsuit, this period extends from November 10, 2020, to August 5, 2024, inclusive. If you purchased or acquired ZoomInfo Class A common stock during this period, you may be eligible to participate in the lawsuit and potentially recover losses.

Lead Plaintiff Deadline

A crucial aspect of this class action lawsuit is the lead plaintiff deadline. If you wish to serve as a lead plaintiff in the ZoomInfo class action lawsuit, you must take action by November 4, 2024. This is the final date to file a motion with the court to be appointed as a lead plaintiff.

As a lead plaintiff, you would act as a representative party on behalf of other class members in directing the litigation. This role carries significant responsibilities, including making decisions that can affect the outcome of the lawsuit for all class members.

It is important to note that being a lead plaintiff is not a guaranteed position. The court will review all motions filed and select the most adequate plaintiff or plaintiffs to represent the class. Factors considered in this decision may include the size of the plaintiff's financial interest in the case and their ability to effectively represent the class.

If you are considering serving as a lead plaintiff, you should consult with a qualified securities attorney to understand the responsibilities and potential risks involved. Remember, even if you don npt become a lead plaintiff, you may still be eligible to participate in any potential settlement or judgment as a class member if you purchased ZoomInfo securities during the specified Class Period.

As this legal action progresses, it's crucial for affected investors to stay informed about developments in the case and understand their rights and options. The outcome of this lawsuit could have significant implications for ZoomInfo and its shareholders, potentially leading to financial compensation for those who suffered losses due to the alleged misconduct.

Understanding the Allegations Against ZoomInfo

The ZoomInfo class action lawsuit brings to light several serious allegations against the company. These claims focus on misleading statements, coercive practices, and their financial impact. Let us analyze each of these areas to understand the nature of the accusations.

Misleading Statements

The ZoomInfo class action lawsuit alleges that ZoomInfo and its executives made false and misleading statements during the Class Period. You should be aware of the following key points:

Inflated Results: The company's financial and operational results were temporarily inflated due to the COVID-19 pandemic. This created an artificial surge in demand for ZoomInfo's digital contact information database.
Customer Attrition: ZoomInfo allegedly failed to disclose that significant portions of its existing customer base were attempting to reduce their use of the company's product or abandon it entirely.
Overstated Metrics: As a result of these factors, ZoomInfo's reported revenues, operating income, and customer and retention metrics were materially overstated.

Coercive Practices

The lawsuit accuses ZoomInfo of employing manipulative and coercive tactics to retain customers. These practices allegedly included:

Auto-Renew Policies: ZoomInfo used aggressive auto-renewal policies to force customers into extending their contracts, even when these clients wished to discontinue the service.
Legal Threats: The company allegedly threatened litigation to compel customers to remain with ZoomInfo for additional contractual terms against their will.
Damaged Relationships: These coercive customer retention tactics reportedly caused significant harm to ZoomInfo's customer relationships, client franchise, and competitive advantages.
Hidden Demand Cliff: The aggressive retention strategies created a concealed demand cliff for future customer contract renewals, potentially impacting the company's long-term stability.

Financial Impact

The allegations against ZoomInfo have had significant financial repercussions for the company and its investors. Key events and their impact include:

November 1, 2022: ZoomInfo announced Q3 2022 financial results, revealing increased customer scrutiny during contract renewals. This led to a "retrace" in Net Revenue Retention (NRR) and a more than 29% drop in stock price.
July 31, 2023: The company reported a decline in high-value customers and reduced its annual revenue guidance by $50 million at the mid-point. This announcement caused the stock price to fall approximately 28% over two trading sessions.
May 7, 2024: ZoomInfo disclosed weakness in its small business customer segment, with Net Revenue Retention declining to 85%. The company further reduced its annual revenue guidance, resulting in a stock price drop of more than 24%.
August 5, 2024: ZoomInfo announced a $33 million charge due to customer non-payments and implemented a "new business risk model." The company further reduced its annual revenue guidance by $65 million at the midpoint, leading to an 18% decline in stock price.

These financial impacts highlight the severity of the allegations and their potential consequences for ZoomInfo and its investors. As the lawsuit progresses, you should stay informed about any developments that may affect your investment in ZoomInfo securities.

The Lead Plaintiff Process

The lead plaintiff process is a crucial aspect of class action lawsuits, including the ZoomInfo class action lawsuit. This process, governed by the Private Securities Litigation Reform Act of 1995 (PSLRA), allows investors who have suffered losses to take an active role in directing the litigation.

Eligibility Criteria

To be considered for the role of lead plaintiff in the ZoomInfo class action lawsuit, you must meet specific criteria:

Securities Acquisition: You need to have purchased or acquired ZoomInfo Class A common stock during the Class Period, which spans from November 10, 2020, to August 5, 2024.
Financial Losses: You must have suffered financial losses as a direct result of the alleged securities fraud perpetrated by ZoomInfo and its executives.
Typicality and Adequacy: Your legal claims should be typical of those asserted on behalf of the class. Additionally, you must demonstrate your ability to adequately represent the interests of the entire class through experience, resources, and the absence of conflicts of interest.

The court typically selects the movant with the greatest financial interest in the relief sought by the putative class as the lead plaintiff. This individual should also be typical and adequate of the putative class.

Benefits of Serving as Lead Plaintiff

Taking on the role of lead plaintiff comes with several advantages:

Decision-Making Power: As a lead plaintiff, you act on behalf of all other class members in directing the ZoomInfo class action lawsuit. This gives you a voice in important decisions regarding the case.
Choice of Legal Representation: You have the right to select a law firm of your choice to litigate the securities class action lawsuit.
Cost Negotiation: You can negotiate more competitive attorney fees and help reduce litigation costs.
Case Management: You'll have the opportunity to oversee the progress of the case and review important filings.
Settlement Involvement: You can participate in mediation and settlement discussions, having a say in decision-making processes regarding the settlement.
No Financial Risk: Lead counsel covers all costs and expenses and are paid only if they secure a settlement or judgment recovery for the class.
Potential Long-term Benefits: The litigation may result in governance reform, which could have long-term benefits for shareholders.

It is important to note that your ability to share in any potential future recovery of the class action lawsuit is not dependent upon serving as lead plaintiff. However, taking on this role allows you to have a more significant impact on the direction and outcome of the case.

How to Apply

If you wish to serve as lead plaintiff in the ZoomInfo class action lawsuit, you must take action before the deadline. Here's how to apply:

File a Motion: You need to move the Court no later than November 4, 2024, to be considered for the lead plaintiff position.
Seek Legal Assistance: It's advisable to consult with a securities attorney such as Timothy L. Miles who can guide you through the process and help you file the necessary documents.
Provide Required Information: Be prepared to provide details about your ZoomInfo stock purchases during the Class Period and the losses you've incurred.

Remember, the lead plaintiff serves as a representative party acting on behalf of other class members in directing the litigation. While this role carries significant responsibilities, it also offers you the opportunity to play a pivotal role in seeking justice and potential compensation for all affected investors.

Conclusion

The ZoomInfo class action lawsuit has a significant impact on investors who purchased the company's securities during the specified period. This legal action sheds light on alleged misconduct, including misleading statements and coercive practices, which potentially led to financial losses for shareholders. By understanding the key allegations and the lead plaintiff process, affected investors can make informed decisions about their involvement in the lawsuit.

To wrap up, the ZoomInfo class action lawsuit serves as a reminder of the importance of staying vigilant and informed about the companies in which one invests. Whether choosing to become a lead plaintiff or simply participating as a class member, investors have options to protect their interests and potentially recover losses. As the case unfolds, it will be crucial to keep an eye on developments that could shape the outcome for ZoomInfo and its shareholders.

CONTACT ZoomInfo STOCK LOSS LAWYER TODAY TIMOTHY L. MILES TODAY ABOUT A ZoomInfo CLASS ACTION LAWSUIT

If you suffered losses in ZoomInfo stock, contact ZoomInfo stock loss lawyer Timothy L. Miles today for a free case evaluation about a ZoomInfo class action lawsuit. Call today and see what a ZoomInfo stock loss lawyer could do for you if you suffered losses in ZoomInfo stock. This will most likely be the only call you need to make. (855) 846–6529 or [email protected].

The Law Offices of Timothy L. Miles
Tapestry at Brentwood Town Center
300 Centerview Dr., #247
Brentwood, TN 37027
Phone: (855) 846–6529
Email: [email protected]

ZoomInfo stock loss lawyer Timothy L. Miles

Nashville attorney Timothy L. Miles is a nationally recognized shareholder rights attorney raised in Nashville, Tennessee. Mr. Miles has dedicated his career to representing shareholders, employees, and consumers in complex class-action litigation. Whether serving as lead, co-lead, or liaison counsel, Mr. Miles has helped recover hundreds of millions of dollars for defrauded investors, shaped precedent-setting decisions, and delivered real corporate governance reforms. Judges and peers have repeatedly recognized Mr. Miles’ relentless advocacy for the underdog, as well as his unbendable ethical standards. Mr. Miles was recently selected by Martindale-Hubbell® and ALM as a 2022 Top Ranked Lawyer, 2022 Top Rated Litigator. and a 2022 Elite Lawyer of the South. Mr. Miles also maintains the AV Preeminent Rating by Martindale-Hubbell®, their highest rating for both legal ability and ethics. Mr. Miles is a member of the prestigious Top 100 Civil Plaintiff Trial Lawyers: The National Trial Lawyers Association ,Class Action: Class Action: Top National Trial Lawyers, National Trial Lawyers Association (2023), a superb rated attorney by Avvo, a recipient of the Lifetime Achievement Award by Premier Lawyers of America (2019) and recognized as a Distinguished Lawyer, Recognizing Excellence in Securities Law, by Lawyers of Distinction (2019); a Top Rated Litigator by Martindale-Hubbell® and ALM (2019-2022); America’s Most Honored Lawyers 2020 – Top 1% by America’s Most Honored (2020-2022). Mr. Miles has published over sixty articles on various issues of the law, including class actions, whistleblower cases, products liability, civil procedure, derivative actions, corporate takeover litigation, corporate formation, mass torts, dangerous drugs, and more. Please visit our website or call for free anytime.
• Top 100 Civil Plaintiff Trial Lawyers by The National Trial Lawyers Association (2017-2022).
• Class Action: Top 25 National Trial Lawyers by the National Trial Lawyers Association (2023)
• AV® Preeminent™ Attorney by Martindale-Hubbell® (2014-2022).
• AV® Preeminent™ Attorney – Judicial Edition (2017-2022).
• Top Ranked Lawyer by Martindale-Hubbell® and ALM (2019-2022).
• Top Rated Litigator by Martindale-Hubbell® and ALM (2019-2022)
• Elite Lawyer of the South by Martindale-Hubbell® and ALM (2019-2022).
• PRR AV Preeminent Rating on Lawyers.com by Martindale-Hubble® (2018-2022).
• America’s Most Honored Lawyers 2020 – Top 1% by Lawyers of Distinction (2020-2021).
• America’s Most Honored Lawyers 2020 – Top 1% by America’s Most Honored (2020-2022).
• Top 1% of Attorneys in America by Premier Lawyers of America (2019-2021).
• Nation’s Top One Persent by the National Association of Distinguished Counsel (2021).
• The Top-Rated Lawyer in Litigation™ for Ethical Standards and Legal Ability by Martindale-Hubble® (Feb. 2015).
• Distinguished Lawyer, Recognizing Excellence in Securities Law, Lawyers of Distinction (2019-2021)
• Lifetime Achievement Award by Premier Lawyers of America (2019-2021).
• Superb Rated Attorney, (10.0 out of 10), the Highest Rating Possible by Avvo.
• Avvo Top Rated Lawyer (Avvo 2017-2022).
• Avvo Client's Choice Award 2021 (Avvo 2021).
• Elite Lawyer 2021 by Elite Lawyer (2019-2021).
• America’s Most Honored Professionals – Top 1% (American Registry 2016-2022).
• Top Rated Lawyers in Tennessee (Lawyers of Distinction 2021-2022)

CONTACT
The Law Offices of Timothy L. Miles
Tapestry at Brentwood Town Center
300 Centerview Dr., #247
Brentwood, TN 37027
Phone:(855) 846-6529
Email: [email protected]
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